One of the keys to negotiation is understanding the language. Most car dealers use the trade difference method and this is very confusing to some customers. For instance, the salesperson will say "We will trade for $7000 difference, plus payoff, plus TTF-Tax, Title, Fees". Just to make things simple we will say that you are buying a $27000 vehicle. This means that your vehicle appraised for $20000, or less if there are rebates involved. Now, you may owe $30000 on your car, meaning that you are actually financing $37000 on this vehicle, plus TTF. Most customers cannot understand that the payoff has to be added back to the deal.
$27000 minus $20000 is $7000 trade difference, plus payoff, in this case $30000 which will give you $37000, plus TTF.
This method is used to make you forget about how much your trade is worth because it makes you focus on the payoff instead of the amount appraised on your car. Ask the salesperson to break your numbers down so you can analyze them better. Sale price, trade amount, rebates if applicable, taxes, and so on. I myself would rather lay everything out in the open for the customer and not give the old smoke and mirror approach.
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